In This Article:
Release Date: February 28, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Spectris PLC (SEPJF) reported a strong finish to 2024 with full-year profits slightly ahead of revised guidance.
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The company maintained a strong track record on dividends, marking the thirty-fifth year of successive growth.
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Spectris PLC (SEPJF) executed strategic acquisitions, strengthening its divisions and aligning with its ambition to be a global leader.
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The company delivered a good cash performance with a cash conversion rate of 88%.
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Spectris PLC (SEPJF) made significant progress towards its net zero goals, achieving a 22% reduction in scope 1 and 2 emissions.
Negative Points
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Sales for the full year were down 7% on a like-for-like basis due to prolonged weakness across end markets.
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The company experienced a 3% decrease in like-for-like order intake, reflecting subdued market conditions.
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Spectris PLC (SEPJF) faced challenges with elevated costs of capital impacting customer CapEx and R&D expenditures.
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The ERP system implementation incurred higher than expected costs, totaling 45 million pounds.
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Net debt at the end of the year was 549 million pounds, with leverage at 2.3 times on a covenant basis.
Q & A Highlights
Q: How has trading been for Micromeritics, particularly in the clean tech sector, given the political changes in the US? A: Unidentified_1: We are pleased with Micromeritics' performance since joining the group, meeting their acquisition business plan. While China has softened, we anticipated this, especially in clean tech. Despite an oversupply in battery delivery, there's significant R&D in next-generation batteries, which is promising for long-term growth.
Q: How should we view the order improvement for the first and second half of 2025, given the current consensus on organic growth? A: Unidentified_1: We anticipate a progressive recovery in order intake, likely more weighted towards the second half of 2025. The recovery phase will be uneven, with some markets moving faster than others.
Q: Can you provide an update on the ERP system rollout and future costs? A: Unidentified_2: We have stabilized the ERP system, costing slightly more than expected at 45 million. We have a blueprint for future rollouts, with costs expected to decrease. The next phase is scheduled for Q3 in our Dynamics division.
Q: How do you plan to address the seasonality in profitability, particularly the Q4 dependency? A: Unidentified_2: We are exploring ways to change direct fixed costs to more variable ones to mitigate seasonality. The virtual test business, which is lower margin but growing, also affects the blend as we enter the year.